The choice for digital transformation success: the expert organization for DX

The need for and role of a dedicated digital transformation organization

‘The choice for digital transformation success: the expert organization for DX’. I’d like to talk about the first part of the talent acquisition and organizational structure to drive digital transformation (DX) success: creating a dedicated digital transformation organization.

If I had to define a digital transformation organization in one word, it would be a center of excellence for digital transformation within an enterprise. The reasons for having a separate organization of experts are the same whether you’re in IT or non-IT. It’s to quickly solve problems that require specialized expertise. The key to this is to have dedicated people working on projects, whether they’re pulled out of departments, hired separately, or part of a group of experts.

Distinction from traditional IT organizations and the importance of specialist organizations

The same reasoning applies to the creation of a new digital transformation organization, which is separate from the existing IT organization. This is to create a separate organization under the direct supervision of the CEO, and to establish a compensation and personnel evaluation system that matches the status of a professional organization. It may seem a bit excessive, but it is necessary to operate the organization separately from the existing organization, even if it is temporary.

Later, when the business is activated in earnest and additional employees are hired due to the implementation of digital transformation, the organization will enter an expansion phase. At that time, it may break the mold of a professional organization and decentralize into a business organization. The end goal is to have an organization that is aligned with the internal operations, but in the short term, a separate specialist organization is needed to accelerate digital transformation.

Strategies for improving digital capabilities across the company

How do you run an organization when you want to improve digital capabilities across your entire workforce? Even if it’s not about digital transformation, it’s about improving organizational culture. This is where a professional organization can be effective. Otherwise, it can have unintended consequences. For example, if a manufacturing company with factories wants to increase the digital competence of its employees, it usually selects veterans in their respective fields.

Then we bring them together and train them. You continue to invest in them until they reach the level you need. Once the digital skills of the veterans from each department have improved, they are brought back into the organization. They are now the center of their respective departments, acting as a focal point for dissemination training and new and evolving technologies or ways of working. In this way, the acquisition of specific, relatively accessible skills, or even simple training, can be scaled up to transform an entire organization.

Challenges and solutions for developing digital capabilities in Digital Transformation

However, when it comes to digital competence, which is what we’re talking about in DX, it’s not easy to succeed in this way. DX goes beyond the acquisition and dissemination of intellectual information and requires a more fundamental change in working practices and culture. What would happen if DX were practiced in this way? First, a group of veterans from each department would be assembled.

Then, as far as training and upskilling goes, it’s not much different than it was before. But when they want to go back to their original departments to evangelize, they can’t easily overcome the forces of inertia that dominate traditional organizations. Executives expect these veterans to come in and raise the overall capability of the organization, but it doesn’t happen as quickly as they think.

It takes time, but here’s what I recommend. Start by treating the specialist organization of veterans as if it were a completely different organization, investing in them and training them. Once they’ve reached a certain level of competency, you don’t bring them back to their current organization, but instead, you send them to work alongside the organization that needs to change. We also consolidate physical office space.

We don’t change their jobs, but we do bring them in to work alongside the expert organization so they can get a taste of what it’s like to work digitally. By the time they’ve gone through this process, they’ll have a similar level of understanding of the digital culture as the experts, and they won’t have as much trouble using the tools. Once they are able to understand and utilize DX to a certain extent, we send them back to their original location, and we place another organization next to the expert organization. In this way, you can slowly increase the digital capabilities of the entire organization, like getting your clothes wet in a drizzle.

DX strategy for large organizations: incremental change and reorganization

What if you have a large organization? What if you need to change more than 20 people at once, and you can’t move next to an expert organization due to physical space limitations? In this case, you can either divide the large organization into smaller units and operate as described above, or you can hire veterans from your existing on-site organization and train them in proportion to the size of the organization.

There are only so many people in the field that one person can deal with, so the absolute number of people should be proportional to the size of the organization. If that’s not possible, then you’ll need to invest time in changing the current organization by mobilizing all the members of the expert organization. Of course, we’re not recommending this. It’s better to start with a small, controllable group of people and work your way up.

Changing people, especially changing ways of working or culture, is the most difficult task for organizations. Simply adopting a given business model without changing the way a company works and its culture is unlikely to bring about fundamental change. If you’re constantly thinking about how to change the perceptions and behaviors of your employees, you’ll be able to come up with your own solutions, whether you choose the ones we’ve suggested or create new ones we haven’t mentioned.

The role and importance of Center of Excellence

The CoE is a team of experts with diverse backgrounds, education levels, and experience. Each expert has the highest level of expertise in their respective subject matter. While there are many experts in the marketplace, CoEs are different because they are armed with an entrepreneurial spirit and attitude. The CoE must have a complete understanding of the entire business value chain, know the customer’s expectations and the company’s available technical resources to properly align technology and market mechanisms.

It should also act as a hub for innovation and information exchange between sales, customers, and partners. Unlike hypothetical teams that are set up at the boundaries of departments and hinder efficiency, CoE teams are goal-oriented teams with one clear mission, vision, and strategy.

A CoE is a flexible and innovative organization that drives innovation. They understand that moving faster than their competitors is the only way to succeed. For them, speed and flexibility are paramount, and this success is only possible by selecting the best people.

When you’re about to embark on the most important and strategic part of your digital transformation, when you’re setting goals and planning for the future, when you’re painting your corporate vision, building a CoE team of top experts is a way to increase your chances of DX success. They will drive DX as a team with stronger motivation, focus, and clarity of purpose.